Tech Salaries Stayed Strong Through Mid-2022
Pay for remote tech workers outpaces local salaries in most markets
The San Francisco Bay Area had the highest average salaries for tech workers in 2022, followed by Seattle and New York, with engineering management roles seeing the highest compensation.
These findings were reported in September by Hired, an online recruiting marketplace for technology talent, in its Navigating an Uncertain Hiring Market: 2022 State of Tech Salaries report. The researchers analyzed Hired's proprietary data from more than 907,000 interview requests across over 47,750 active positions, collecting data from January 2019 through June 2022. Hired also surveyed over 2,000 tech professionals on their salary, benefits and flexible work preferences.
"The hiring climate this year has been full of contradictions and challenges," said Josh Brenner, Hired's CEO. "We've seen climbing salaries, aggressive hiring and layoffs—all at once. However, the hiring landscape remains competitive as companies innovate and diversify their teams through remote work."
The surge in remote work during the COVID-19 pandemic allowed "employers to expand their talent pools and candidates to find more opportunities outside their backyards," Brenner said.
In the San Francisco Bay Area, the average local salary for tech workers was $174,063, followed by Seattle ($168,069), New York City ($161,128), Boston ($158,548) and Austin ($157,612).
Average local salaries for candidates in midsize markets (such as Boston, Los Angeles and Seattle) are now on par with the salaries in larger tech hubs (New York City and San Francisco), the report showed.
A Premium for Experienced Workers
In 2022, salaries increased across nearly all tech roles, driven primarily by growth in the pay of experienced professionals (those with more than three years of experience), according to the report. While the number of companies seeking to hire remote junior-level talent has grown, local salaries for junior-level candidates have failed to grow as quickly as salaries for professionals with more years of experience, as employers leaned heavily into hiring more experienced talent.
Remote Workers Paid Above Local-Market Rates
Remote salaries for tech workers have continued to outpace local salaries, with remote roles for employees working for firms based in tech hub cities paying $3,000 more on average than similar positions at local companies.
Average remote salaries climbed to $162,950 this year, ranking third-highest overall after the San Francisco Bay Area and New York average local salaries.
Additional Findings
Other findings from the report include the following:
- Engineering management roles still pay the highest among tech roles across the U.S., the U.K. and Canada. The U.S. had the highest local salaries for these roles, averaging $196,000. Design, data analytics and quality assurance roles also saw steep salary increases this year.
- Employers expanded talent pipelines by hiring across markets and time zones. Businesses of all sizes are more open to interviewing tech candidates from other locations, the researchers found. Candidates showed an increased preference for remote-only roles, with 32 percent of all active job seekers open to "only remote" roles on the Hired platform, up from 18 percent in January 2022.
- Time to acquire tech candidates has slowed. In 2022, it took an average of 60 days to acquire tech candidates in the U.S. Remote roles took 40 days to fill, up slightly from 39 days in 2021.
- The exodus from traditional big tech hubs has pushed salaries higher in smaller cities. Philadelphia (+12 percent), Dallas/Fort Worth (+11 percent) and Denver (+11 percent) showed the highest average local salary increases across all markets. Other high-growth markets globally were Toronto and London, which ranked above Boston, New York, the San Francisco Bay Area and Seattle this year in terms of year-over-year salary growth.
If denied an expected raise in the next six months, the majority (90 percent) of polled tech workers said they would start looking for a new job immediately.
Will the Tech-Pay Bubble Burst? Despite the strong growth in tech workers' pay this year, fears of a severe recession in 2023 may have begun serving as a brake on rising tech salaries. On Sept. 29, Meta, the owner of Facebook and Instagram, reportedly told employees it is freezing new hiring and warned of restructuring and downsizing. Bloomberg reported that CEO Mark Zuckerberg announced the hiring freeze during a weekly Q&A session with staffers, telling them most team budgets would be reduced. Other tech firms have also cut their headcounts in recent months as the U.S. and global economies have slowed while central banks raise interest rates to try to bring surging inflation under control. "Seemingly overnight, the tech industry flipped from aggressive growth, hiring sprees, lavish perks and boundless opportunity to layoffs, hiring freezes and doing more with less," The New York Times reported in September. Amid economic uncertainty, "Oracle, Tesla and Netflix laid off staff, as did Peloton, Shopify and Redfin. Meta, Google, Microsoft and Intel made plans to slow hiring or freeze it. Coinbase and Twitter rescinded job offers." Despite the economic uncertainty, however, "plenty of tech companies are still hiring," The Times reported. "Many of them expect growth to bounce back, as it did for the tech industry a few months after the initial shock of the pandemic in 2020. |
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